Year-end inflation seen at 7%, up from earlier | business | Hindustan Times
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Year-end inflation seen at 7%, up from earlier

Reserve Bank of India (RBI) governor D Subbarao had strong message for all in the quarter monetary policy review: brace yourself for a spell of high inflation, at least in near term.

business Updated: Jul 31, 2012 23:17 IST
HT Correspondent

Reserve Bank of India (RBI) governor D Subbarao had strong message for all in the quarter monetary policy review: brace yourself for a spell of high inflation, at least in near term.


RBI pegged inflation rate at the end of March 2013 at 7% — up from the 6.5% forecast in April — as poor rains that have been 21% deficient so far this year, threaten to push up food prices.

“The deficient and uneven monsoon so far will have an adverse impact on food inflation,” the policy statement said.

Inflation has remained elevated for the last few months. Wholesale inflation rate was 7.25% in June, while retail inflation or shop-end prices grew at 10.02% during the month.

On a year-on-year basis in June, vegetable prices rose the sharpest at 28%, while milk and allied products shot up 13.2%.

“Input price pressures on account of exchange rate movements and infrastructural bottlenecks in coal, minerals and power may exert upside pressure on non-food manufactured products inflation,” RBI said.